'Pact Between JK Govt, RBI Win-Win Situation'

'Pact Between JK Govt, RBI Win-Win Situation'

25 May 2011
Kashmir Observer


Srinagar: The Jammu and Kashmir Bank chairman, Mushtaq Ahmad, Wednesday termed recent pact between the State Government and the Reserve Bank of India as win-win situation for his bank and also the government. Speaking to media persons here, Ahmad said, “Let us not create any confusion over it (the pact). It is in the interests of JK Bank and JK Government as well.” Under the recent agreement, which came into force from April1, 2010, the RBI shall carry on the general banking business of the Government of Jammu and Kashmir and act as the sole agent for investment of Government’s funds. Elaborating, what he meant by saying win-win situation for both, the Bank Chairman said, “JK Bank was acting as principal banker to the state government. Under RBI norms we can’t lend more than 40 percent of capital and reserves to one party. So under this situation we couldn’t have lend more than Rs 1200 crore to the state government. But the overdraft had already crossed Rs 2300 crore.” “We received back our Rs 2300 crore and have lend that money more than 13 percent interests,” he added. Ahmad said that the idea to make the RBI take over from the J&K Bank the role of providing overdraft facilities to the state government was mooted over by his predecessor, Dr Haseeb Drabu in 2004, when he was economic advisor to the state government. He said that JK Bank was second largest employer in the state. “By end of March 2012 we will increase our braches from 548 to 600. When I took over, there were 270 ATMs and it has reached 368 now. By next year we will have 600 ATMs,” Ahmad said. “The policies and plans of the Bank are aimed at socio-economic development of the state through active participation in employment generation and poverty alleviation programmes. A silent economic transformation is steadily taking place across the state,” he added. Asked about the role of JK Bank in cross-LOC trade, he said, “Two countries (India and Pakistan) have to agree on the formalities first then commercial banks can operate. Right now the trade is being operated on barter system.” Asked about the issue of overstay of some officials in J&K Bank’s Corporate office, he said, “We are examining the issue. If some official has over stayed at one position we will transfer him. But transfers should not be for the sake of it.” On Sheri-I-Kashmir Employment and Welfare Programme for Youth (SKEWP), Ahmad said, “To promote and project the idea of self-employment through entrepreneurship in J&K is thrust area of the Bank. We have taken a lead role in operationalsing and implementing the SKEWP. The Bank has constituted a task force for monitoring implementation of this scheme and also to counsel and guide the unemployed youth.” On the overall growth of the Bank, he said, “The financial results of 2010-11 reflect implementation of business strategy aimed at qualitative and quantitative growth in the business of the Bank. The performance during FY 2011 has put the Bank on a growth trajectory for achieving the planned target of Rs 1,00,000 crore business and Rs 1000 crore profit by March 203.”


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